In
the suit, Starbucks contends Wellshire was supposed to provide Black
Forest ham for use in breakfast and lunch sandwiches but instead
supplied an inferior product from the Maryland firm. Wellshire rejects
those claims and denies any wrongdoing.

A Starbucks attorney declined to comment Monday. A lawyer for Wellshire Farms could not be reached.

According
to the suit, a Starbucks contractor chose Wellshire's product after
holding a blind taste test for a warmed breakfast sandwich in January
2008. Other contractors followed a similar process in selecting
Wellshire's ham for a chilled lunch sandwich in the fall of 2009.

The sandwiches, assembled by the contractors, were sold at Starbucks stores across the United States and Canada.

"Starbucks,
however, did not know, and Wellshire failed to reveal, the fact that
the ham with Wellshire's name on it was actually produced (by Hahn),"
the lawsuit asserts.

Starbucks contends it learned of Hahn's role
only after a rising number of consumer complaints prompted it to
investigate the ham's source. The lawsuit says the complaints began in
September 2010, with customers saying the ham was discolored, had an
unusual taste and appeared spoiled.

A month later, Starbucks
issued "Stop Sell and Discard" notices for its breakfast ham sandwiches.
The company said a probe then revealed quality problems with ham
shipped by Wellshire, and an executive at the firm "pleaded with
Starbucks to maintain its supplier relationship, assured Starbucks that
the September incident was not Wellshire's fault and asserted that the
September 2010 incident was an isolated incident."

The lawsuit says Starbucks received more complaints within days, then learned Hahn was actually producing the ham.

"This
revelation from Wellshire came several months after the complaint
began," says the suit, which was transferred Monday to federal court in
Camden after being filed in July in Washington state.

In a court
filing, Wellshire denies Starbucks' claim, including an allegation that
laboratory testing in December 2010 found "potentially harmful bacteria"
in a sample of the ham.

That alleged finding resulted in a second "Stop Sell and Discard" notice for the breakfast sandwiches, Starbucks says.

According
to the lawsuit, Starbucks issued a final "Stop Sell and Discard" notice
for all ham sandwiches after a third-party audit reported "fundamental
deficiencies in the way the ham was being cooked and processed by Hahn."

The
coffeehouse chain then told its contractors to stop using Wellshire
products and paid them an undisclosed amount "to minimize the financial
impact of these actions." Starbucks asserts it lost more than $4.8
million "protecting its customers and Starbucks' reputation."